Clarification of Margin Reqs for Diagonal Spreads on IB

Discussion in 'Interactive Brokers' started by Safilo, Nov 1, 2013.

  1. Safilo

    Safilo

    I have a question regarding options and margin requirements for doing "diagonal credit spreads" on IB.

    An example would be a writing a call on a far-term month that is say >90 days in the future and then buying a call for the same number of contracts at the same (or lower) strike price, but on a near-term month. The near-term options would then be rolled as expiry approaches to ensure that the short position is offset in case of assignment.

    Sell: Dec 2015 100
    Buy: Nov 2014 100

    The IB website says they calculate margin requirements in realtime but do not have a specific information about this type of spread,

    What I want to know is this:

    If the margin is calculated in real time, prior to the expiry of the Nov 2014 Call, would IB consider this a "margin neutral" position? Or do they consider the position uncovered regardless of whether or not I buy Nov 2014?
     
  2. Safilo

    Safilo

    The answer to my question is that on IB their order optimizer considers this as a diagonal spread and adjusts the required margin accordingly regardless of the expiration dates.
     
  3. zdreg

    zdreg

    they then consider the position to be neutral?
     
  4. Safilo

    Safilo

    No, not neutral.